Foreign Trade: A Political Plum for Farmers

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When the White House helped push a new compromise budget plan through the Senate two weeks ago, it needed votes from farm-state Senators. As a result, the Administration agreed to help U.S. farmers improve their sagging sales in foreign markets. Keeping that promise, Agriculture Secretary John Block last week unveiled a new program that will in effect subsidize farm exports. Over the next three years the Government will give $2 billion worth of its surplus stock of agricultural commodities, like wheat and corn, to U.S. export companies. Under the plan, exporters will continue to buy grain from American farmers at regular market prices, but could then, for example, combine their purchases with free grain from the Government and thus be able to sell shipments to foreign customers at reduced rates.

Block said the new program was justified because many foreign countries, especially in Western Europe, subsidize farm exports. Block admitted that the plan "is not good policy," but said falling farm shipments left the U.S. with "no other alternative." Foreign sales of U.S. agricultural products this year are expected to total only $34.5 billion, down 20% from their 1981 peak.